In Germany, poor payment behaviour of public buyers is an issue, while in Poland protracted payments are high. Overdue payments up to 30 days are common.

European football championship 2016

Sector playing field: construction industry

Germany: a strong rebound after bad performance in the past

Just like the German national football team construction suffered a major crisis in the late 1990s and early 2000s, but has bounced back since then, becoming increasingly successful. According to the German Builders Association, turnover growth will increase 3% in 2016, to EUR 103 billion.

Poland: the last European championship was a watershed

Polish construction activity was strong ahead of the last 2012 EURO in Poland and the Ukraine, especially in infrastructure building. But just like the Polish football team failed to reach the Round of 16, the construction industry saw a serious deterioration of production since H2 of 2012, as major projects had been completed and many contracts turned out to be unprofitable as material prices increased. Construction insolvencies increased by more than 50% in 2012 and remained very high in 2013. However the sector rebounded in the course of 2014 and registered a production growth of 2.8% in 2015.

Players to watch

Germany

Residential construction is expected to increase 5% in 2016, driven by a high employment rate, low interest rates and the need to provide new housing for the high number of refugees and asylum seekers.

Poland

Residential construction production value increased 9% in 2015 and is expected to grow further in 2016, driven by the robust economic performance in Poland.

In the public construction segment demand is expected to increase in 2016 and beyond, but low prices are serious issue for building businesses.

Major strengths and weaknesses

German construction industry: strengths

Polish construction industry: strengths

Increasing demand and stable profit margins expected in 2016

In general, businesses are not highly indebted

Construction businesses´ dependence on bank finance is not overly high, given that in advance or instalment payments by investors are a major source of financing.

Significant amount of specialization, especially in construction service

Strong in technical innovations especially in the area of energy-efficiency